50 Clintons Republican governors follow Clinton's lead

National Review, Nov 9, 1998 by Stephen Moore

MORE than at any other time in America's history, our state governments today are under the command and control of the GOP. Thirty-two states, including 7 of the 8 largest, have Republican governors. The confident talk at the Republican National Committee these days is that another 3 to 5 governorships may move into the Republican column come November, including those of such politically prized states as Colorado, Florida, and Georgia.

Only in California do Democrats seem likely to win back a major governorship. Meanwhile, in just the past six years Republicans have gained some five hundred state legislative seats; again, more pickups are expected on election day. Given this decisive Republican tilt in state politics, one might expect state budgets to be shrinking. But they're not. They're hemorrhaging. Over the past three years state governments have been surfing on a wave of prosperity that has filled their coffers to the brim with tax collections. The result? Since 1995 state budgets have expanded nearly 50 per cent faster than even the federal budget. To be sure, the biggest spenders have been liberal Democrats like John Kitzhaber of Oregon and Lawton Chiles of Florida. But on spending matters it's getting harder to detect the difference between the Ds and the Rs in the nation's statehouses. This year many Republican governors recommended 7, 8, and even 10 per cent increases in expenditures-this, in an era of close to zero inflation. When asked about these prodigious GOP-sponsored budgets, George Voinovich, the liberal two-term Republican governor of Ohio, who appears headed to the U.S. Senate in January, explained: "We recognize that there are problems to be solved and that there is a role for government to play." Wisconsin's Tommy Thompson admits that there is "a new breed of activism among us." Republicans this year are showcasing Clintonite spending initiatives for children's programs, school construction, environmental clean-up, day-care subsidies, and job training. If a Ronald Reagan lower-tax agenda got these governors elected in the first place, most are now gambling that parroting Bill Clinton will keep them in office. The Washington Post recently ran a front-page story describing the Republican governors' schizophrenic new philosophy as "conservative and pro-government at the same time [sic]." The governors are nurturing a "softer image," the story reports. New social spending is to be found "everywhere in Republican budgets." NR reporter Ramesh Ponnuru discovered that the Post article was proudly faxed by the Republican Governors Association to GOP donors and grassroots activists. Consider the fiscal odyssey of three of the GOP's highest-profile governors: John Rowland of Connecticut, Christine Todd Whitman of New Jersey, and George Pataki of New York. In the early 1990s they vanquished the murderers' row of tax-and-spend liberals: Lowell Weicker, James Florio, and Mario Cuomo. They all won their races by preaching a combination of pro-growth, Reagan-style income-tax cuts and old-fashioned fiscal belt-tightening. They all confounded their critics (and allies, as well) by delivering promised tax relief ahead of schedule. In George Pataki's first two years in office, New York's budget shrank by $1 billion and New Yorkers' tax bills were slashed by $3 billion. John Rowland cut taxes, froze the state workforce, enacted tough welfare-to-work requirements, and converted a $500-million deficit into a four-year $1-billion surplus. "We are overthrowing all the unworkable liberal abstractions of the past," Pataki told a Heritage Foundation audience two years ago, "and replacing them with a revolution of conservative ideas." Then each of these governors caught the spending virus. Christine Whitman recommended new gasoline and cigarette taxes to pay for an enormous 8 per cent budget hike to fund such essentials as bike paths ($15 million), a state pay hike ($116 million), and "members' projects"-a patrician's way of saying "pork"-including Yogi Berra and Frank Sinatra museums ($60 million). The Hartford Courant pilloried Rowland's latest budget for "pouring new money into traditional Democratic programs-education, the environment, children's programs, and rent and nursing-home subsidies for seniors." As for all those "unworkable liberal abstractions," somehow they found their way into every nook and cranny of Pataki's obese $70-billion 1999 budget. The one-year $5-billion spending spike was the largest ever. Just six months earlier Pataki had infuriated state conservatives by endorsing a $1.75-billion environmental bond initiative, which was nothing more than a wet kiss to the labor unions, the green lobby, and GOP construction contractors. With the crummiest bond rating in the country, the last thing New Yorkers needed was to be saddled with more debt. "All the progress Pataki made in his first two years is unraveling," laments Tom Carroll, president of the taxpayer watchdog group, Change NY. And so it goes with most of the nation's 32 Republican governors. In 1998 states were confronted with an enormous $40-billion aggregate surplus-the biggest pool of excess tax collections in more than twenty years. About $6 billion was passed back to taxpayers. The other $34 billion was either spent or dumped into a "rainy day" fund. Where did things go wrong? The state capitals, after all, should be the incubators for conservative Republican policy innovations. And for years they have been just that. On many issues, Republican governors have transformed the policy landscape-in almost all cases for the better. Following the lead of Michigan's John Engler and New Jersey's Christine Whitman, more than half the states have enacted supply-side tax-rate cuts. Wisconsin's Tommy Thompson and Minnesota's Arne Carlson have been tireless crusaders for school choice. George W. Bush of Texas defeated the parasitic Texas trial lawyers and enacted tort reform that has cut legal costs in the state by nearly one-quarter. It has not been so much the GOP Congress as GOP governors who are responsible for the one-third reduction in welfare dependency. Herein lies the enigma of the GOP governors. In the slow-growth years of the early and mid 1990s, when every dime was a coveted asset, these governors impressively bit the bullet, cutting taxes to re-energize their economies and starving low-priority state agencies to make sure the bills got paid. In his first term Gov. Engler took a surgical knife to the Michigan budget: he eliminated five thousand state-government jobs, ended the dole for Michigan's fifty thousand employable adults on welfare, and cut 16 different taxes. A $1.5-billion deficit was converted into a $500-million surplus, and the unemployment rate for this Rustbelt state plummeted to one of the lowest in the nation. Yet in the late 1990s, with tidal waves of cash flowing into the state treasuries, Engler and others now spend and hoard. Many governors have begun to nickel-and-dime taxpayers to death with fees, fines, tolls, and excise taxes. More than half the governors have raised the state gas tax, with the biggest increases coming in Wisconsin, New Jersey, Utah, and Montana. Almost two-thirds of the governors have called for tobacco tax hikes. All this, even though the tax-cutting issue still packs a potent electoral punch, as evidenced by Jim Gilmore's 1997 "No Car Tax" gubernatorial campaign in Virginia. Ten years ago, when Democrats ruled the roost, America was riding the crest of a similar expansion-one on which it seemed the sun would never set. States were cash rich and governors like Michael Dukakis (remember the Massachusetts Miracle?), Bruce Babbitt, and Mario Cuomo spent opulently. It was Democrats in those days who boasted of a "new breed of activism." When the punchbowl was whisked away, these once-popular governors were suddenly up to their bushy eyebrows in red ink and, soon enough, out of office. "We are broke," a deflated Mario Cuomo acknowledged in a rare moment of candor in 1990, "down to the marrow of our bones." Could the same ignominious fate await Republican big spenders? The lesson that the good times never roll on forever is something that lawmakers seem genetically incapable of learning. Most Republican governors are riding high this year with approval ratings around 70 per cent. If the economy tanks, these free-spending Republican governors will be the first political casualties.